6.1 Overview of E-Business and E-Commerce
E-Commerce (EC): describes the process of buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.
E-business: is a broader definition of EC, including
1. buying and selling of goods and services
2. servicing austomers
3. collaborating with partners
4.conducting e-learning
5. conducting electronic transactions within an organization.
Pure versus Partial EC depends on the degree of digitization involved:
1.The product can be physical or digital.
2.The procesq can be physical or digital.
3.The delivery agent can be physical or digital
Brick-and-mortar: purely physical organizations
Click-and-mortar: organizations are those that conduct some EC activities, yet their business is primarily done in the physical world [multichannneling]
Pure Play: organizations that are engaged only in E
Types of E-Commerce
Business-to-Consumer (B2C): the sellers are organizations and the buyers are individuals
Business-to-Business (B2B): both the sellers and buyers are business organizations
Consumer-to-Consumer (C2C): both the sellers and buyers are individuals
E-Commerce Business Models
Online Direct Marketing: manufacturers sell directly to customers
Electronic Tendering System: businesses (or governments) request quotation from suppliers [uses B2B or G2B] -[Example: e-tendering The Tender Board ]
E-auction – an auction which is held over the Internet. www.ebay.com
Forward Auction: the highest bidder wins the auction
Reverse Auction: the lowest bidder wins the auction
1.Affiliate marketing: Vendors ask partners to place logos or banners on partner’s site. If customers click on logo, go to the vendor’s site, and buy, then the vendor pays commission to partners.
2.Viral marketing: receivers send information about your product to their friends.
3.Group purchasing: small buyers aggregate demand to get a large volume discount [E-Coops]
4.Product customization: customers use the Internet to self-configure products or services. Sellers then price them and fulfill them quickly.
Limitations of E-Commerce
1.Technological Limitations
Lack of universally accepted security standards
Insufficient telecommunications bandwidth
Expensive accessibility
2.Non-technological Limitations
Perception that EC is unsecure
Unresolved legal issues
Lacks a critical mass of sellers and buyers
6.2 Business-to-Consumer B2C
Electronic retailing (E-tailing): the direct sale of products and services through the Internet
E-marketplace: a central, virtual market space on the Web where many buyers and sellers can conduct E-commerce and E-Business activities
E-storefront: a Web site that represent a single store www.dell.com
E-mall/ Cybermall: a collection of individual shops under one Internet address http://www.e-mall.com.sa/
Issues in E-Tailing
Channel conflict: occurs when manufacturers disintermediate their channel partners such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers, usually over the Internet through e-commerce.
[Ford allows customers to configure a car online but requires them to pick it up from a dealer, where they arrange financing, warranties and services]
Multichanneling: is a process in which a company integrates its offline and online channels.
Order fulfillment: finding the product to be shipped; packaging the product; arrange for speedy delivery to the customer; and handle the return of unwanted or defective products.
Online Advertising
Advertising : an attempt to disseminate information in order to influence a buyer-seller transaction.
Online Advertising methods
Banner: simply electronic billboard [can be customized]
Pop-up ad : appears in front of the current browser window.
Pop-under ad: appears underneath the active window.
Permission marketing: asks consumers to give their permission to voluntarily accept online advertising and e-mail.
[sometimes customers are paid to view online advertisements]
Viral marketing: refers to online “word-of-mouth” marketing.
6.3 Business-to-Business (B2B)
In B2B e-commerce, the buyers and sellers are organizations
There are several business models for B2B applications:
1.B2B Sell-Side Marketplace
2.B2B Buy-Side Marketplace
Electronic Exchanges
B2B Sell-Side Marketplace
In the sell-side marketplace, organizations sell their products or services to other organizations electronically from their own Web site and/or from a third-party Web site.
This model is similar to the B2C model in which the buyer comes to the seller’s site, views catalogs, and places an order. In the B2B sell-side marketplace, the buyers are organizations
Purchasing card: is the B2B equivalent of electronic credit cards and is typically used for unplanned B2B purchases.
Electronic cash
Stored-value money cards allow you to store a fixed amount of prepaid money and then spend it as necessary.
Smart cards contain a chip called a microprocessor that can store a considerable amount of information and are multipurpose – can be used as a debit card, credit card or a stored-value money card.
Person-to-person payments are a form of e-cash that enables two individuals or an individual and a business to transfer funds without using a credit card.
E-wallet
6.4 Electronic Payments
1.Implementing EC typically requires E-payment
2.E-payment systems enable you to pay for goods and services electronically.
E-check: encrypted check with digital signature that is similar to a paper check, and is used mostly in B2B.
E-credit card: allows customers to charge online payments to their credit card account, and is used mostly in B2C.
6.5 Ethical and Legal Issues
Cybersquatting refers to the practice of registering domain names solely for the purpose of selling them later at a higher price.
The original owner of www.tom.com received $8 million for the name
Taxes and other Fees: when and where (and in some cases whether) electronic sellers should pay taxes
Copyright: protecting intellectual property in e-commerce and enforcing copyright laws is extremely difficult
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